is repeated so long as clear oil can be made to flow. Pinching in or stripping was resorted to after the Chinampa pool was drained and is now being done to Alamo and Potrero and will be resorted to in Zacamixtle and Amatlan. Estimation of Mexican Fields. The following recent estimate of the Mexican fields has been made by Messrs. L. G. Huntley and Stirling Huntley, prominent American geologists: Estimating the life of Cerro Azul and Tierra Blanca, with an estimated reserve of 200,000,000 bbls. at 1,000 days (on the assumption that they produce at the combined rate of 200,000 bbls. per day after the Amatlan pool is drained) at the time of their being finally flooded, they in their turn should strip 10,000 bbls. or more per day each from wells on the crests. This reserve will be partly sold to other companies and therefore will probably be pulled on much faster than this. While it is impossible to say how long this stripping can go on, there is good evidence that such wells will be long lived, as they are probably fed by oil working up the flanks of the structure over the entire former producing area. Much of this oil must have been cut off by the sudden flooding of the pools and will now be largely available to such strategic wells as those mentioned. This will allow one to estimate that after all the Southern pools have been flooded there will still be a production in the Mexican fields of 250,000 bbls. per day at the end of 1,000 days from July 1, 1921 (December 1, 1924) on the assumption that the new drilling in the Panuco River field increases production. This alone is sufficient to be a considerable factor in the oil market, particularly the fuel oil market. Meanwhile it can be assumed that the prospecting will have probably extended the producing areas in the Panuco River district and those to the south and west of the Alamo. In the latter region there are good indications that there will be found pools of relatively light oil in sand and limestone formations above the Tamasopa, as well as in the latter formation itself. In the case of the probable pools yielding from reservoirs above the Tamasopa, these will undoubtedly have smaller wells producing over a longer period of time in comparison with the large Tamasopa wells to the north. It is even possible, if later and higher prices warrant it, that this region will see pumps installed for the first time in Mexico. lows: "The present reserves in producing pools may be shown as fol Amatlan Zacamixtle Tierra Blanca Total Barrels 50,000,000 .150,000,000 50,000,000 250,000,000 "In addition to the above reserves are the Panuco River pools which have not been limited and seem capable of considerable exten sion. "These amounts disregard later recoveries from the same areas through stripping wells. as the factor used in the calculations was derived from the data in the Tepetate-Chinampa area, which excludes later recoveries. Early in 1921, before the market decline, the daily production was: Panuco River fields Amatlan-Naranjos-Zacamixtle Total Barrels .145,000 ..400,000 30,000 10,000 .585,000 Less Amatlan, in 125 days will lower production to...... ..185,000 "But this disregards oil reserves from various sources, which may therefore be added and summarized, giving the following estimated possible production by fields after Amatlan goes to sea water: *Probably greater on account of the sales to other companies. **Depending on company's policy. Operations in Panuco and Topila. The American consul at Tampico has observed that production operations in the Panuco and Topila fields are somewhat different in character than in the Southern fields, in that part of them are conducted by individuals and small companies or aggregations of individuals; whereas the major part of development work in the Southern fields is conducted by large corporations which not only drill the wells but construct refineries, pipe line, pumping stations, and loading terminals, and ship the oil by their own tank steamers. Thus they conduct all the operations of production and marketing and the matter of cost price or value at the well concerns them but little. Many of these companies also have valuable properties in the Panuco district. Shipments of Panuco oil have been practically confined to such companies. Lately much activity has been noted among independent producers (confined largely to the Panuco field) finding outlets for their product through brokers and as a result, something resembling a trading market has been formed and a value for the different oils established. Formerly the big producing pools of Mexico were controlled in most cases by a single company and neither fear of having their property drained by a rival nor competition operated to force production by the individual companies. From the standpoint of conservation of the oil supply, such an arrangement was desirable for a minimum amount of oil was wasted through over-production and in sufficient storage. At the present time, the heavy producing pools, particularly in the South fields region, are in most instances being pulled on by competing companies with little regard to conservation of the supply. Exploration of New Fields. George Otis Smith, director of the United States Geological Survey, puts the proved area of Mexican oil lands at about 10,000 square miles, with resources of 4,500,000,000 bbls. and the potential output of unproved territory at 1.250,000,000 bbls.; a total estimate of 5,750,000,000 bbls. or a supply adequate for 45 years at the 1920 rate of exports. A greater part of the unproven territory in the known oil zones is already in the hands of the large corporations. The exhaustion of the Amatlan pool will mark the passing of the independent operator in the South fields region to a considerable extent. The Panuco River region has always been essentially a small man's field. The enormous reserves of petroleum lands situated in the producing regions held by the Mexican Petroleum Co. (Doheny) and the Aguila Co. (British) allow these companies to regard the intrusion of salt water in their present wells with a certain degree of equanimity. The Royal Dutch Shell interests control nearly 400 square miles of valuable fee-simple and leasehold oil lands. The Mexican Petroleum Co. has obtained a 40 year lease on nearly 800,000 acres in the Tampico district on land which shows extensive oil seepages. This addition increases greatly the life of the extensive properties already owned by this company. The Marland Oil Co. of Mexico has extensive holdings of undeveloped lands in Mexico, including 280,000 acres in the Tuxpan-Tampico area, 65,000 acres in the TabascoChiapas region and large concessions in Lower California and Sonora. Increasing attention is now being given to exploration or “wildcatting" in various parts of Mexico for the discovery of oil. Geological conditions indicate that other petroleum fields of great importance will be discovered in Mexico, and that such discoveries will be of a petroleum of a much better quality than that now being produced. A report of the Mexican Petroleum Section of the Department of Commerce, Industry and Labor, places the zone of possible production in the Gulf States at more than 80,000,000 acres and in Lower California at about 18,000,000 acres. Of this immense area, only about 10,000,000 acres have been investigated which illustrates the scope offered for wildcat operations in Mexico. The combined area of the fields now being exploited in Mexico does not exceed 1,200 square miles. Exploitation has now extended into the districts of Tlacalulu and Cobos. The Tlacalulu district is in an oil bearing formation, situated in the extreme southeast corner of the State of San Luis Potosi, 50 miles southwest of Tampico. The Cobos district lies directly across the Gonzales River from Tuxpan and extends southwest for 50 miles. It is regarded as a determined field and exploitation is going on. Exploration is particularly active in the Isthmus of Tehuantepec and in the region south of Vera Cruz. Many seepages occur in this region. The Tabasco district is the oldest oil field in Mexico, the oil produced being of 32° Be' but former production was in such small amounts that competition with the richer Panuco and South fields was impossible. Extensive leasing is under way and actual development again in progress, principally by the Royal Dutch-Shell interests, although the Standard Oil and Mexican Gulf companies are active. The Grijalva River is being deepened at Frontera, which city is to be the port of the Tabasco field. Possibilities in Scattered Regions. The discovery of what is believed to be extensive petroleum deposits on some islands in the Gulf of California has been announced. These islands are close to the shore of Sinaloa, due west of Hermosillo, and the deposit is thought to extend to the mainland of Lower California. The proximity of these areas to the producing areas of the State of California, the probability that portions of Lower California and Sonora are underlaid by a counterpart of the producing horizon of the California fields in the United States, the evidence of petroleum on the surrounding waters and the continued extension of the California fields southward leads to the belief that these areas on the west coast will yet produce petroleum in commercial quantities. Explorations are being carried on in other parts of Mexico as follows: Durango, in the neighborhood of Mapimi; Oaxaxa, near Puerto Angel; Colima, in the vicinity of Santa Rosalia and of Manzanillo; Chihuahua, in the vicinity of Casas Grandes, Guzman, Trinidad, Santa Maria, and southwest of Ojinaja; Coahuila, at Ubalde, near Piedras Negras, and Nuevo Laredo; Chiapas, in the Departments of Palenque and Mezcalapa; San Luis Potosi in the Valles district; Jalisco in the vicinity of Lake Chapala, and in various parts of Yucatan. On September 1, 1921, there were 240 strings of drilling tools in operation throughout Mexico as follows: While the cost of drilling wells in Mexico is high, there are other costs which precede drilling and which amounts to a considerable figure. These include the cost of prospecting by highly-paid geologists, the expenses of negotiating the purchase and lease of oil territory, the amount paid for the properties if purchased, or the rentals if leased, the very substantial recording and stamp fees encountered in Mexico, the expense of perfecting title (which is considerable, due to the successive divisions of the land) the cost of clearing the land, the construction of roads and water lines, materials for transporting supplies through the jungles, and many other items of expense peculiar to operations in Mexico. |